Fintech Startups Can’t Be A Replacement For Banks: RBI Deputy Governor

Fintech Startups Can’t Be A Replacement For Banks: RBI Deputy Governor

SUMMARY

Sankar directed Indian banks to be more diligent in adopting technological changes

The RBI’s deputy governor said banks missed the bus by not investing in the technology early on, leading to non-banking entities gaining an edge in the space

The official said that the central bank’s experiments with the wholesale and retail central bank digital currencies (CBDCs) have so far been rewarding

Deputy governor of the Reserve Bank of India T Rabi Sankar has rubbished speculations that fintech startups would replace banks. Terming such opinions ‘misconceptions’, Sankar said that banks are more than willing to embrace technology. He, however, directed them to be more diligent while adopting technological changes. 

“It’s a misconception to view fintech entities as a possible replacement to banks,” Sankar said, while addressing an event organised by the Indian Banks’ Association in Mumbai. 

Noting that banking was mutating fast, he stressed that banks have to adopt fast to the changes being brought about by technological progress. 

Citing the widely popular unified payments interface (UPI) technology, Sankar noted that banks missed the bus by not investing in the technology early on, leading to non-banking entities gaining an edge in the space. 

Describing the way forward as newer technologies emerge, Sankar said that the only options before banks are collaboration, absorption or internalisation.

”Private money in the modern age can only be bank money,” Sankar added, while noting that technology will help achieve trust and greater efficiency in this pursuit.

Meanwhile, addressing the gathering, the RBI’s deputy governor said that the central bank’s experiments with the wholesale and retail central bank digital currencies (CBDCs) have so far been rewarding. The retail pilot of RBI’s digital currency, e-Rupee, went live on December 1. 

Sankar said that the central bank’s move to develop its own digital currency was largely driven by people’s rising interest in private cryptocurrencies. The RBI official said that the CBDCs offer multiple benefits, including increased privacy, and international payments and settlements. 

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Fintech Startups Can’t Be A Replacement For Banks: RBI Deputy Governor-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Fintech Startups Can’t Be A Replacement For Banks: RBI Deputy Governor-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Fintech Startups Can’t Be A Replacement For Banks: RBI Deputy Governor-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Fintech Startups Can’t Be A Replacement For Banks: RBI Deputy Governor-Inc42 Media
Fintech Startups Can’t Be A Replacement For Banks: RBI Deputy Governor-Inc42 Media
You’re in Good company